Important FDIC News

issued a Financial Institution Letter on Monday, November 5 (FIL-45-2012) announcing that "...absent a
change in law, beginning January 1, 2013..." the TAG program will expire.
 The letter encourages banks to take "reasonable steps" to
notify affected account holders of the change.  IBAT will be working on a
draft notice that member banks can use to provide important information to
depositors on the continuation of FDIC insurance in general and the impact of
the expiration of the TAG program.

Repossessed Automobiles

of vehicles is a fairly common practice for a bank and especially during poor
economic times.  But you should be aware of a few items that you may not
have considered.

The  liability exposure  repossessed autos present.
  As an example,
your bank has repossessed a vehicle and it is being test driven by a potential
buyer.  The potential buyer has an at-fault accident and causes bodily
injury and/or property damage to others.   If your auto policy has
been endorsed to include the Repossessed Auto endorsement for liability
coverage, this situation would be covered.  Without the endorsement, the
bank's auto policy would exclude the situation.

Repossessed Auto endorsement amends the definition of "covered auto" to include
autos being repossessed and held by the bank for sale, during and after the
repossession, at scheduled locations.  Banks with multiple
locations and those who may use a car lot to sell the repossessed auto should
check with their insurance carrier to determine if all locations are included
for coverage.  An insurer may require a listing of all locations or they
may allow broader verbiage such as "All locations where repossessed vehicles
are stored."  

this example, the vehicle was being used for a test drive in hopes of being
sold.   That's important, as the Repossessed Auto endorsement allows
for coverage ONLY during the repossession and sales process.  In most
situations, there is no coverage when repossessed vehicles are used for other
business or personal purposes.   As an example, there would be no
coverage if a bank employee runs an errand using a repossessed auto. 
 If you plan to use a repossessed vehicle for other business or personal
purposes, you should schedule the repossessed vehicle as an OWNED vehicle under
your bank's auto policy.

Another area of concern is the physical damage coverage for the repossessed
This coverage could include Comprehensive or Specified Causes of Loss and Collision. 
The Repossessed Auto Endorsement can include a Limit of Insurance (Value) that
should represent the maximum value of all repossessed autos at risk at any one
time.  Generally the value is the same for the Comprehensive or Specified
Causes of Loss coverage and the Collision, but here's an example of how it
works and why that value is important.  A terrible hail storm destroys
most of the vehicles in your area, including the 3 repossessed autos you
currently have on your scheduled lot.  Your limit of insurance for either
Comprehensive or Specified Causes of Loss is $25,000 because you don't normally
have more than one repossessed vehicle at a time.  Unfortunately this is a
bad economy and you have 3 now - a 2008 Lexus, 1995 Ford F150 and a 2000 Buick. 
Let's say the combined current value of these three vehicles is $125,000. 
That makes you about $100,000 short on coverage. The Comprehensive and/or
Specified Causes of Loss deductible applies to each covered auto and a maximum
deductible applies for all losses in any one event. 

the Collision Limit of Insurance, if stated at $25,000 also, might be adequate
to repair damage sustained by the one repossessed vehicle involved in a
collision event.  Hopefully the event doesn't include damage to two of
your repossessed vehicles...which would be unlikely.  The Collision
deductible applies for each covered auto. 

short, there are four questions to keep in mind as you're reviewing this
exposure at your bank:

  • Is your auto policy endorsed to include the
    Repossessed Auto Endorsement?
  • Does it allow for all of the locations that
    house your Repossessed Autos?
  • Do you have good controls regarding the use of
    those vehicles - only allowing the vehicle to be driven for test drives or any
    purpose to promote the sales process of that vehicle, such as routine
    maintenance, inspection, etc.?
  • Does your limit of insurance on Physical Damage
    allow for the current worst case scenario of loss OR just the minor losses that
    you may be able to self-insure?

The IBAT Financial Services
stands ready to discuss this or any other insurance issues with you. 
Don't hesitate to call any member of our Team.

Due Diligence

margins and non-interest income are on the minds of almost every community
banker in Texas, but regulators sent a warning shot to those looking at new fee
producing third-party relationships, according to an article in American Banker last week.

"Federal Reserve
examiners are focusing on how institutions, especially small banks, plan to
recoup revenue lost from reduced exposure to commercial real estate," the
article said, referencing comments made by Kevin Bertsch, the associate
director in the Fed's division of banking supervision and regulation.  

The article
went on to identify sufficient due diligence as the major issue of focus by

"Everyone is
on the lookout for that silver bullet to stem the tide of lost revenue," said
Chris Williston, president and chief executive officer of IBAT, "but, regulator
comments highlight the need for advanced due diligence on third-party
relationships.  Getting those relationships right on the front end will
clearly translate into a lot fewer headaches down the line."

IBAT has
established a stringent system of due diligence for endorsed service providers
through the involvement of the IBAT Services Board of Directors.  To learn
more about the IBAT due diligence process for endorsements, please click here.

Leadership in Action

The only way to grow your small business into a
real company is to hire employees. While doing this well will be one of your
biggest keys to success, it is also the most difficult to achieve.
Small-business owners are notorious for being bad at hiring employees who make
valuable contributions over a long period of time. Here are the seven keys to
staffing up your company effectively. More

Basel III

outcry against the Basel III capital proposals grew ever-louder last week as
sixteen members of Texas's Congressional delegation signed a letter to federal regulators opposing the
measures.  This is in addition to the Congressional letters we mentioned
last week from Representatives Conaway, Hensarling and Neugebauer.  

"A one-size-fits-all approach to banking regulation has the potential to
create more unintended consequences than it yields in market stability,"
the letter said, echoing long-time calls by IBAT for a bifurcated regulatory
structure which accounts for the traditional business model of community banks.

IBAT extends our sincere thanks to these members of Congress for their support
on this vital issue. We encourage IBAT members who live in the sixteen
districts represented by these members to extend their thanks as well.

Early Voting - Last Chance!

opportunity to participate in early voting for the upcoming election ends this
Friday evening.  To locate your polling place, please follow these instructions. The "big day" is
next Tuesday, November 6.
 Whether you vote early, or with the masses on Election Day, please do
take time to vote, and encourage those in your circle of influence to do the

last week's edition of The Bottom Line, we
reviewed a number of "competitive" races and indicated those
candidates receiving support from the IBAT PACs in those races.
 Additionally, we provided a link to judicial candidate recommendations.
 Rather than reprint that information, we encourage you to access that
information here.

Treaty Oak Bank Conversion

Tony R. Clark, President and CEO
of NORTHSTAR BANK OF TEXAS recently announced that
Treaty Oak Bank will become part of NORTHSTAR BANK

effective November 5th, 2012. 

a member of Carlile Bancshares, Inc., headquartered in Fort
Worth, TX, NORTHSTAR BANK is the largest community
bank in Denton County,
and one of the largest in the Dallas / Ft. Worth
area.  Over the past 13 years, NORTHSTAR, as a full-service bank, has grown from 2
locations to 10 locations located throughout North Texas,
with assets over $1 billion. 

NORTHSTAR continues to be a
leader in the banking and mortgage industries. 
 Their professional staff and personalized
style of banking have been the key ingredients to their success.  Mr. Clark stated: "We are excited to expand
our NORTHSTAR BANK work family into the
Central Texas region and be able to deliver
our unique, personalized style of banking to the area."  Ron Simpson, President of Treaty Oak Bank,
affirmed:  "This merger will be an asset
to the customers of Treaty Oak Bank knowing that the conversion will bring
added resources, products and services to the markets we currently serve."

NORTHSTAR BANK recently brought recognition to our industry once again,
when they were named as one of the Best Companies to Work for in Texas for the year 2012
for the 4th straight year.  This
program was created in 2006 and is a project of Texas Monthly, the Texas Association of Business (TAB), the Texas
State Council of the Society of Human Resource Management (TSC-SHRM), and Best
Companies Group.

the move into the Austin and Marble Falls
areas, NORTHSTAR BANK OF TEXAS looks forward to
expanding its hometown style of community banking into Central
Texas, with all the benefits of that a mega bank would bring.  Watch for our "star" rising in this

Member FDIC and Equal Housing Lender

Lone Star Capital Bank

ANTONIO, TX (October 23, 2012) - 
Lone Star Capital Bank
was honored to be recognized as a United Way pacesetter for the second year in
a row as a record breaking 1,200 business and community leaders gathered last
week at the United Way's kick-off luncheon.

bank has already contributed $22,424 this year, a 20 percent increase over last
year's donation and, for the eighth year in a row, the bank attained 100
percent participation from its employees.

efforts of Lone Star Capital Bank, along with the other organizations that
gathered to kickstart this year's campaign, contribute largely to San Antonio
being named the number one best performing city in America for United Way
giving.  Combined giving from local pacesetter institutions in 2012
totalled $32.9 million - an unprecedented lead toward the $49.3 million goal.

collected for the United Way will be invested in 135 high-quality programs and
initiatives at 64 agencies throughout the community, ensuring that vital work
will continue to assist older adults, respond to emergencies, fight hunger and
homelessness, strengthen families, promote early childhood education, help young
people stay in school and graduate, support the disabled, and build a stronger

Star Capital Bank specializes in providing customized banking services for
entrepreneurs, executives, professionals, small businesses and real estate
investors. It is a member of FDIC and an Equal Housing Lender.

Social Media

media is an everyday reality that is penetrating through the walls of our daily
lives. The use of social media has become unavoidable due to the use of smart
phones, laptops, and tablets that people are using to connect with people all
over the world. People are constantly posting pictures, tagging posts about
their current location, and even sharing mass amounts of personal information
to the World Wide Web through social media websites like Twitter, LinkedIn, and
Facebook. Some people see this over share of information as a bad thing, but in
reality it can actually be an asset to your business as long as you remember
three things about social media. They are three easy to remember lessons: Be
passionate, know your company's identity, and trust your people.

first lesson, be passionate, is key to using social media. Have you ever gone
to a grocery store and been overwhelmed by how many different choices of water
there are? You look around and there are twenty choices for "different" types
of water all at the same price and you have no idea which one to pick because
there actually isn't much of a difference. You end up picking the first pack of
water you see, or you walk away from the water all together because you're
overwhelmed by the endless choices. This is kind of like the world of Twitter.
Every day limitless amounts of content circulates Twitter because companies
force their employees to share information to popularize the company's brand.
This is wrong. This type of information is typically ignored by the public
because it is not personalized and not interesting to read about it. The key to
fixing this problem is to stir passion in your employees. Get your employees
excited about unique things that are going on within the organization. This
will then create a desire within the employees to promote your company through
social media. The passion in their tweets will then create interaction between
customers and your company. That passion will help create that unique brand
recognition that will make your company stand apart from the rest.

second lesson is to know your company's identity. What makes your company
unique? What makes your employees want to work hard so that your organization
can be successful? It is important to celebrate your company's values because
they make up your company's identity. If you are a small and low cost company
you do not have to have a Facebook page just because it seems like every other
company does. In fact having a Facebook page for that type of company could
actually clash with your brand image. Remember to know what your company
values, know what your company needs to be successful, and then use the
necessary tools to achieve that success.

third and final lesson is to trust your people. Since social media is so deeply
intertwined with our everyday lives, it would almost hurt your company more to
block all forms of social media in the workplace.  Instead you should make
social media important to your employees.  Be strategic with social media
by creating a type of training session for your employees that teaches them how
to use social media successfully for the company and for themselves. Have the
right tools in place to show them what is appropriate and what is good for the
company, but remember to never force your employees to use social media because
that can hurt your company more than it actually can help.

media is a wonderful emergent tool that, when used properly, can benefit your
company exponentially. Embrace twitter, Facebook, and any other social media
website and use them to your advantage. Today we discussed three things about
social media that can make your company successful: be passionate, know your
company's identity, and trust your people. If you remember to use all three of
these tools you will help eliminate the mass amount of clutter and noise that
circulates the web and you will have effectively used social media to your
company's advantage.

Silver Alert


NWS Brownsville &
Corpus Christi


Pharr PD is searching for Martin Anaya, diagnosed with
Alzheimer's, White, M, 92 years old, DOB 11/11/19, HEIGHT 5' 3", WEIGHT 130
lbs, Gray Hair, Brown Eyes, wearing blue button shirt, khaki pants and a white
cowboy hat.                                    

The senior
citizen was last seen at 1:00 p.m., 10/24/12 at 426 E Villegas, Pharr, TX
78577, driving a White, 2003 Nissan Frontier with TX License Plate 951-9AY.

enforcement officials believe this senior citizen's disappearance poses a
credible threat to HIS/HER own health and safety.

If you have
any information regarding this missing senior citizen, contact the Pharr Police
Department at 956-784-7700.

News Media
Point of Contact is
Police Department at 956-784-7700.